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MARKET CLOSE: NZ shares march higher as low rates keep yield attractive

Friday 6th September 2019

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(Sept. 5, 5:49 PM) New Zealand shares continued their march into uncharted territory as the low interest rate outlook continues to boost the allure of firms paying reliable dividends, such as property investors and power companies. 

The S&P/NZX 50 Index rose 98.54 points, or 0.9 percent, to 11,106.67. Within the index, 33 stocks rose, 10 fell, and seven were unchanged. Turnover was $155.4 million. 

The local market joined a global rally as investors were buoyed by news that US and Chinese officials will return to the negotiating table. Their trade war threatens to derail the international economy and has encouraged central banks to cut interest rates, which boosts the attraction of stocks. 

Vital Healthcare Property Trust led the market higher, up 3 percent at $2.75 on a volume of 282,000 units, compared to a 90-day average of 263,800.

Genesis Energy rose 3 percent to $3.65, Goodman Property Trust was up 1.8 percent at $2.215 on a volume of 1.4 million units, and Meridian Energy increased 3 percent to $5.54 with 1.8 million shares changing hands. 

Grant Williamson, a director at Hamilton Hindin Greene, said low rates continued to drive the share market higher, with a number of high-quality stocks, such as Meridian and Goodman, coming in for special attention when the Australian market opened. 

"Some stocks are very hot at the moment," he said. 

A weaker currency is also providing support for exporters. A2 Milk advanced 2.6 percent to $15.10, Scales Corp rose 2.3 percent to $4.91, Fisher & Paykel Healthcare increased 2.1 percent to $17.20 and Vista Group International was up 1.2 percent at $4.11. Pushpay Holdings rose 0.9 percent to $3.29 on a bigger volume than normal of 2.2 million shares. 

Spark New Zealand was the most traded stock on a volume of 3.7 million shares, compared to its 3.3 million average. It rose 0.7 percent to $4.57. 

Trading in Sky Network Television was unusually active with a volume of 2.4 million shares. The stock was unchanged at $1.11. The NZ Herald reported that the pay-TV operator will offer $400 million to secure the next five-year cycle for rugby rights. 

Air New Zealand dipped 0.2 percent or 0.5 cents, to $2.215 on a volume of 1.6 million shares. The stock shed rights to its 11-cent dividend today. 

Of other companies trading on volumes of more than a million shares, SkyCity Entertainment Group increased 1.3 percent to $3.90, Kiwi Property Group was up 2.1 percent at $1.675, NZX was unchanged at $1.27, Z Energy rose 0.6 percent to $6.54, and Contact Energy decreased 0.2 percent to $8.92.

Auckland International Airport was down 2.8 percent at $9.44, the day's biggest decline, on a volume of 1.3 million shares. The NZ Herald reported that Air New Zealand is working on plans for a second airport to service the country's biggest city. 

Fonterra Shareholders' Fund units decreased 1.2 percent to $3.22. 

Stride Property slipped 0.4 percent to $2.34 after saying it will spin out its industrial properties into a joint venture with international institutional investors. Investore Property, which was also spun out of Stride, rose 0.5 percent to $1.93, even as it shed rights to a 1.9 cent dividend. 

Fletcher Building rose 0.4 percent to $4.62 after government data showed the value of building work in the June quarter was almost 12 percent higher than a year earlier. The volume of work was lower than expected.

Of other companies exposed to the building sector, Metro Performance Glass fell 5 percent to 28.5 cents, Cavalier Corp rose 3.6 percent to 29 cents, and Steel & Tube was up 1.2 percent at 86 cents. 

Outside the benchmark index, Smiths City Group was unchanged at 27 cents. The retailer told shareholders today that it's restructuring plan is making progress, but that it expects to report weaker first-half sales due to store closures and an uncertain retail outlook. 

Cannasouth climbed 16 percent to 52 cents on a volume of 976,000 shares. That's the first time it's closed above its initial public offering price of 50 cents since listing in June. 

Napier Port Holdings rose 0.3 percent to $3.08, well above its $2.60 IPO price. About 1 million shares changed hands. 

Heartland Bank's 2024 bonds paying 3.55 percent were the most traded debt security with a volume of 697,000. The notes closed at a yield of 2.56 percent, down 4 basis points. Heartland Group's shares were up 0.6 percent at $1.60. 


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